Sally Wallace

Sally Wallace
Georgia State University | GSU · Department of Economics

Ph.D. Economics

About

110
Publications
29,653
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September 1991 - present
Georgia State University
Position
  • Professor (Full)

Publications

Publications (110)
Article
How far does democracy decrease corruption? And which specific aspects of democracy help generate such effects? Corruption is famously one of the strongest obstacles to social and economic development. Whereas there has been extensive research identifying the causes of corruption, there is little experimental research on the impact of political ins...
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The impact of fiscal federalism on economic performance has largely been studied in the developed world since the seminal work of Oates. In this article, we focus on a particular set of developing countries considered to be federal (Forum of Federations), to examine how fiscal decentralization has impacted their economic growth. In this context, we...
Article
There is a great deal of interest and concern in the trends in income inequality in the United States and how it inequality has changed since the Great Recession. Various reasons for this divide have been offered but are notoriously difficult to evaluate due to data constraints. Public sector programs aimed at alleviating poverty are also difficult...
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The benefits of a college education are well documented. However, the majority of existing research focuses on students who matriculate soon after high school graduation. There is little empirical evidence illustrating whether a college degree is similarly beneficial to those already in the workforce, particularly individuals over 50. Nonetheless,...
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This paper analyzes the impact of confidentiality of taxpayer information on the level of compliance in two countries with very different levels of citizen trust in government − the United States and Italy. Using identical laboratory experiments conducted in the two countries, we analyze the impact on tax compliance of “Full Disclosure” (e.g., rele...
Article
p> We construct earnings mobility matrices for low-income individuals over 6-year and 13-year periods. Our sample of low-income individuals is drawn from the population of SNAP recipients in Georgia. Using Georgia administrative records, we identify SNAP participants in 2000 and their earnings for each year through 2013 using matched employment sec...
Article
Previous work has found that incarceration (defined as confinement in an adult correctional facility) has a variety of impacts on the incarcerated individual and their families including effects on employment and income, educational outcomes of children, and food insecurity (Wallace and Cox 2012). However, previous literature does not identify a ca...
Chapter
The focus of this chapter is on the incidence of taxes in Jordan. All taxes must ultimately be paid by someone, and one of the most fundamental questions asked by economists is: “Who bears the final burden of a tax?” Taxes cause individuals and firms to change their behaviors, and the resulting changes in product and factor prices will affect the i...
Chapter
Egypt, a country of 82 million people with a GDP of $272 billion, is arguably one of the most important countries in the Middle East. At this stage of its transition, the structure and level of public finances are more critical than ever. Like many countries, Egypt suffers from substantial non-compliance, which undermines the entire system of publi...
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The complex financing system that supports health care spending in the US makes estimation of the incidence of financing both daunting and important. A significant portion of financing is embedded in the tax system at all levels of government, while tax expenditures that subsidize private purchases implicitly transfer a large share of financing fro...
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The study investigates the impact of fiscal decentralization on economic growth in Pakistan using time series data for the period from 1972 to 2010. The empirical results show that fiscal decentralization (revenue and expenditures) is an effective tool to foster the economic growth in Pakistan. The increase in the subnational share of total governm...
Article
This study seeks to determine the role that parental incarceration plays on the probability of food insecurity among families with children and very low food security of children using micro-level data from the Fragile Families and Child Well Being Study (FFCWS). The data set contains the 18-question food security module which allows us to explore...
Article
This article addresses the impact on state and local budgets of the underlying trends and tensions facing state and local governments as the United States pulls out of the Great Recession. Noting that recessions are cyclical and there will be a recovery, it draws attention to the "more fundamental challenge for the US state and local fiscal system-...
Article
We explore the effect of the rapid increase in capital gains realizations on state income tax revenue during the 1990s and 2000s, and the effect that this had on state fiscal decisions regarding the use of these revenue. We find wide variation in the growth of capital gains realizations across states and that the growth in capital gains had a signi...
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All health care spending from public and private sources, such as governments and businesses, is ultimately paid by individuals and families. We calculated the burden of US health care spending on families as a percentage of income and found that at the national level, lower-income families pay a larger share of their incomes toward health care tha...
Article
This paper examines the effects of the Tax Reform Act of 1986 on the reporting decisions of taxpayers, using microlevel information from the 1984 and 1989 Statistics of Income. We find that tax reform clearly mattered in the reporting decisions of individuals, with reporting elasticities that cluster between 0.3 and 0.7. However, our results also i...
Article
We combine records of Atlanta Housing Authority (AHA) clients, Georgia Department of Labor (DOL) employment records, and neighborhood characteristics to analyze the causal effect of an exogenous move out of public housing on the employment of public hou sing residents. The exogenous move was caused by a HOPE VI or HOPE VI-like project in Atlanta. W...
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Rural local governments in India provide essential services to over 70 percent of the national population. Yet, little is known about the efficacy of the financing system that supports these local governments, nor is there a fiscal information system that will allow a tracking of rural local government expenditures and revenues. In this article, we...
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Governments of all kinds have frequently and increasingly turned to tax amnesties as part of their fiscal programs. An amnesty typically allows individuals or firms to pay delinquent taxes without being subject to some or all of the financial and criminal penalties that the discovery of tax evasion normally brings. Tax amnesties are a controversial...
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Teen mothers in the United States are more likely to give birth to low birth weight babies. Substantial evidence indicates that smoking is a risk factor correlated with low birth weight. Low birth weight is a costly outcome for parents, children, and society at large. This paper examines the causal link between teen smoking behavior and low birth w...
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This report is about the fiscal performance of rural local governments in the state of West Bengal. Specifically, our goal is to develop a comprehensive fiscal information system for all rural local governments, and to use these data to valuate the intergovernmental finance structure in the state. The work is of significant policy importance, given...
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Who pays Pakistan’s taxes? Do they fall inordinately on low-income families, or on labor working in the formal sector, or is the tax burden borne disproportionately by the higher income classes, who also own most of the capital in the country? The fairness of the tax system is not only affected by who pays taxes, but by who does not. The latter gro...
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In this paper we have applied discrete time survival analysis techniques to analyze education duration in Jamaica. Based on the Jamaica Survey of Living Conditions 2002, we are able to estimate the effects of household, individual, and other related covariates on the risks of students dropping out. We compare the discrete time Cox model and discret...
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In this paper, we report the current state of provincial revenue raising and analyze the potential for increased revenue mobilization. In the sections below, we document the current situation regarding local revenue capacity and mobilization in Pakistan using case studies of Punjab and North-West Frontier Province. We provide an analysis of the dif...
Article
The fundamental proposal for comprehensive individual income tax reform in Pakistan is to provide an integrated income tax structure that pertains to income of all individuals (including non-incorporated businesses) and which otherwise dramatically simplifies the taxation of individual income in Pakistan. An integrated individual income tax would t...
Article
In this paper, we revisit the theory of property tax incidence in light of the conditions in developing and transition countries by modifying the property tax incidence model to account for at least some of the specific conditions of these countries that are thought to affect property tax incidence. We develop and use a computable general equilibri...
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This study reviews the major findings of the previous studies and provides a new set of estimates of the economic impact of the commercial music industry in Georgia. We find that the primary music industry in Georgia has expanded both in terms of establishments and employment, but employment and establishments in secondary music industry, which inc...
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To forecast pre-kindergarten (Pre-K) enrollment in Georgia by county for 2007 through 2011 we use data on actual Pre-K enrollment and data on the population of four year olds. Due to data limitations, we rely on forecasting the population of four year olds from 2005 forward and we forecast Pre-K enrollment based on past relationships between popula...
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The objective of this paper is to provide an assessment of flat tax policies for policy makers. To do this, the paper reviews the theoretical impacts of a flat tax - how might a flat tax affect a country's tax administration, revenue generation, and economy - as well as the experience of countries that have recently introduced flat taxes. This subj...
Article
The timing of the decision of local governments to adopt a local sales tax is explored in a duration model with time-varying covariates. Our framework suggests a set of factors associated with the decision to adopt a local sales tax and we find empirical support for these factors. We also consider whether the adoption by one jurisdiction depends on...
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In this paper we present estimates of the responses of individuals to marginal tax rates in their reporting of income, using data from individual tax returns for the year 1995. One estimation method is ordinary least squares regression. A second method uses quantile regression, which provides evidence on behavioral responses at different points (or...
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Over the past decade, a number of countries have shifted to single-rate tax systems with broader bases and lower rates. In the U.S., there continues to be discussion of the merits of a consumption tax, and of base-broadening reforms to the income tax system. The objective of this paper is to demonstrate how, over time, a conventional income tax cou...
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There are good arguments for an individual income tax on potential income, but a drawback to such a tax is the significant administrative concern regardingits implementation. This paper argues that human-capital theory provides a widely accepted and straightforward method to estimate potential income using observed characteristics of individuals, a...
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The Government of Jamaica imposes a variety of taxes on the earnings of labor. Jamaica’s direct taxes and charges on labor income include the pay-asyou-earn (PAYE) income tax and five payroll taxes. In total, these taxes generate nearly one-third of the total tax revenues of the government in fiscal year 2002-2003, with the PAYE itself responsible...
Article
When the fiscal situation of a country gets too far out of control, government will often call for a comprehensive review of the tax system to try to get back on a sustainable path. Jamaica is just such a case. The Government of Jamaica called in 2005 for a tax reform to address the fiscal problems. The articles in this special issue of Public Fina...
Article
The relationship between sources of income and demand decisions by the household is examined here with an eye toward the ramifications on consumption tax bases. Income sources may be important when households attach psychic and transaction costs to individual purchases or when sources are assigned via a mental accounting process. In either case, ge...
Article
We exploit the exogenous change in marginal tax rates created by the Russian flat tax reform of 2001 to identify the effect of taxes on labor supply of males and females. We apply the weighted difference-in-difference regression approach and instrumental variables to the labor supply function estimated on individual panel data. The mean regression...
Article
The widespread adoption of fiscal decentralization laws during the past 25 years can be mostly tracked to economic efficiency gains and nation-building objectives. Subnational governments (SNGs) in industrialized countries account for about twice the share of total government expenditures as in developing countries. Transition countries also assign...
Article
In this paper, we determine how tax law and income distribution changes have separately contributed to the changes in tax progressivity over time, and also how a specific pre-tax distribution of income affects the equalizing ability of a given tax change. We use information from the Current Population Survey for years that follow immediately after...
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Internal Revenue Code guarantees privacy of taxpayer information in the administration of the U.S. income tax. Many state and local governments also support the confi dentiality of taxpayer data. However, given the growth in on–line tax fi ling and reports of breaches in confi dentiality of credit and banking data, individuals are likely to be incr...
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This study provides empirical evidence on the extent to which taxes influence owners' compensation in small (fewer than 500 employees) Subchapter S– electing corporations (S corporations), taxable corporations that provide professional services (PSC corporations), and other taxable corporations (C corporations). Paying additional compensation to ow...
Article
This paper covers the use (and abuse) of presumptive taxes in general. In this paper, we define more precisely the intended objectives of such systems. We review two simplified regimes - those in Ukraine and Russia. We also analyze the implications of these special regimes in terms of their impact on economic efficiency, equity, and overall tax adm...
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Alternative hypotheses exist regarding the impact of local sales and income taxes on local governments’ taxing and spending decisions. One hypothesis is that local governments use sales and income taxes to pay for spending increases and leave property tax collections unchanged, while an equally plausible alternative is that local governments use sa...
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Jamaica’s individual income tax is an important revenue source for the Government. In 2003-04, the PAYE portion of the tax generated $27 billion, about 22 percent of Government tax revenue and equivalent to about 6.5 percent of GDP. The self-employed pay less than $2 billion in income tax, or 7 percent of PAYE. Jamaica uses the individual income ta...
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The international experience shows a variety of approaches to the organization and degree of decentralization in tax administration. It is quite common to observe, even in countries that are otherwise significantly decentralized as is the case in the Scandinavian Countries, a highly centralized organization of tax administration. Nevertheless, ther...
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This staff paper analyzes this “system” of payroll taxes and contributions, focusing mainly on the tax and contribution side rather than on the benefit aspects of the contribution programs. The administration of each of these payroll programs is discussed, and the effects of the entire system are also analyzed. Much of the analyses is based on micr...
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The Government of Jamaica imposes a wide range of taxes on income, consumption, and property. An important consideration in any reform of these taxes is their impact of the distribution of income, or their tax burden. This staff paper presents background and analysis of the burden of the existing system of taxes. The question of “who bears the fina...
Article
This paper examines alternative explanations for the decline over the past two decades in state corporate income taxes relative to the state economy. We employ a survey of state tax administrators, individual tax returns from Georgia and Utah, and panel data to explore the importance of tax policy, tax planning, and economic factors on the trend in...
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There are two dimensions to the structure of an intergovernmental transfer: the vertical share and the horizontal share (Bahl and Linn, 19921). The vertical share is the total pool of funds to be allocated to subnational governments, while the horizontal shares are the amounts received by eligible local governments. Most research (and most politica...
Article
The state and local tax treatment of the elderly varies significantly from state to state. In this article, we analyze the differences in effective tax rates for the state personal income tax for elderly versus non-elderly taxpayers. We find that in a majority of states, the average effective tax rate facing the elderly is significantly lower than...
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The authors, in a study of Georgia, suggest that changes in the tax structure of one county will influence changes in the tax structures of neighboring counties. In Georgia, there has been a significant shift away from property taxes to alternative local-option sales taxes.
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The authors write that the impact of fluctuations in capital gains taxes on state budgets shows the importance of tax base diversification and the need for awareness of transitory versus permanent increases in tax bases.
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Governments exist, in part, to cope with the weaknesses of their citizens and subsist, to some extent, on the basis of those same weaknesses. Alcoholic beverages have long played a critical role on both sides of this equation. Over-indulgence in drink is a factor in crime, injury, and illness. It is also a potentially lucrative source of tax revenu...
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Economics have devoted relatively little attention to explaining why some state and local governments choose more progressive fiscal instruments than others. This paper provides an empirical model to identify the determinants of income redistribution as a budgetary choice, and estimates the strength of these determinants with state-local government...
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This paper measures the relative importance of quality and quantity effects of corporate taxation on foreign direct investment. Quantity is affected if corporate taxes reduce the equilibrium stock of foreign capital in a given country. Quality effects arise if taxes decrease the extent to which investment contributes to the corporate tax base and t...
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The authors analyze and defend the state income tax on nonresident professional athletes. Officials from all states who responded to their survey indicated that visiting athletes' income is taxable under more general rules for nonresidents.
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There are many ways to tax individuals and corporations. Taxes may be levied on consumption (such as the VAT, sales or excise taxes), flows of income (such as enterprise and individual income taxes), or wealth and assets (such as property taxes, assets taxes, and some income taxes). In fact, the tax systems of most countries are a combination of th...
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Powerful economic, demographic, and institutional and technological changes are occurring throughout the world. The concentration of world population has moved from the developed to the developing economies, the distribution of income in most countries has become increasingly disparate, some developing countries are witnessing unprecedented increas...